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Appreciate the insight. Curious to get your thought here... I do know that some investors look at TVPI and generally understand why, but isn't IRR the only thi
by mbesto 5y ago
Appreciate the insight. Curious to get your thought here...
I do know that some investors look at TVPI and generally understand why, but isn't IRR the only thing that really matters? Philosophically speaking, you can't change the time variable - we're on a continuum - so at the end of the day the only thing that you are able to compare is how well a single dollar performs over time? I understand this doesn't take into consideration liquidity, but TVPI doesn't really either.
- jacobr1 5y agoI'm not sure how it works in VC, but with real-estate investing, the Cash-On-Cash return, which is basically the same as TVPI is extremely helpful when comparing investments that potentially have very different ways to structure the leverage in the deal.
- joshu 5y agotime is very punishing to IRR as it stretches on, but the returns accumulate. you cannot assume a dollar is fungible as you may not have been able to invest in the same thing at some other point.